Buffalo Wild WIngs of Golden Valley is making its first entry into Asia with plans to work with a restaurant operator in the Philippines. File photo.

Glen Stubbe, Jm - Star Tribune

Buffalo Wild Wings heads to Asia

Article by: adam belz

Star Tribune

August 29, 2013 - 6:23 AM

Buffalo Wild Wings Inc. is accelerating its international expansion by striking a deal with a restaurant operator in the Philippines, marking its first foray in Asia.

The company said it is working with the Bistro Group, a Manila-based firm that runs local units of 11 international restaurant chains ranging from TGI Friday’s of the United States to Bulgogi Brothers of South Korea. Bistro Group plans to open Buffalo Wild Wings locations in Manila and nearby Makati City by early next year.

Buffalo Wild Wings, which owns or has franchised 930 outlets in the United States and has opened 13 in Canada since 2011, is making a pronounced overseas push. The firm has already announced plans to open units in Mexico and the Middle East later this year.

In announcing the latest deal, the Golden Valley-based company said the Philippines is a natural market for its brand, which is built around wings, beer, bar food and big TVs for sports fans. “The Philippines have passionate sports fans, who we believe will love the great atmosphere at Buffalo Wild Wings,” Sally Smith, the company’s chief executive, said in a statement.

The Philippine economy has been growing fast in recent years — 7.8 percent gross domestic product growth in the first quarter of 2013 — but the key to the deal is the Bistro Group, said Nick Setyan, an analyst for Wedbush. It is a strong franchisee with a proven record and local knowledge, all things that are critical to international expansion for Buffalo Wild Wings.

“I think if a similarly qualified group was in Russia or somewhere in Southeast Asia other than the Philippines, they would have gone with them,” Setyan said.

Buffalo Wild Wings will receive royalties from the Bistro Group and make little investment on its own. Bistro Group has agreed to open at least five units over five years with the possibility of additional units after that.

“The risk-reward is skewed very much toward reward here,” Setyan said. “There’s no reason not to do it.”

Setyan thinks the restaurant chain is far from maxed out in the United States and could double its presence here. But the move in the Philippines is evidence that its brand can get traction overseas.

Matt Brokl, vice president of international development for the company, said in a statement that the Philippines’ growing middle class is attractive. Buffalo Wild Wings is also considering other international opportunities, the company said.